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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Wednesday, 06 June 12
INDONESIAN GOVERNMENT'S DECLARED COAL PRICES CONTINUING ITS DECLINE
COALspot.com - Indonesian HBA fell to lowest level since January 2011 in June 2012. The monthly coal reference price for coal sales this month ...
Monday, 04 June 12
MITRABAHTERA SUBSIDIARY SECURES CONTRACT FROM BERAU COAL - INSIDER STORIES
Insider Stories reported that, PT Mitra Alam Segara Sejati, a subsidiary that is 60% owned by PT Mitrabahtera Segara Sejati Tbk (MBSS), has secur ...
Sunday, 03 June 12
TTI ESTABLISHES COAL TRADING & MARKETING OFFICE
COALspot.com - TTI has officially established its coal trading, marketing-office in Jakarta, Indonesia. PT. Gunung Tinggi Coal is the TTI’s fi ...
Sunday, 03 June 12
FREIGHT MARKET CONTINUING ITS DECLINE
COALspot.com - The BDI continued to fall for the fifth straight week and the BDI fell by 2.57 pct this week closing at 904 points.
The Cape Size ...
Friday, 01 June 12
TNPL HAS SECURED 300K MT OF 6000 GAD COAL AT US$ 81 CNF TUTICORIN
COALspot.com - An India based coal trader Adani has offered the lowest price of US$ 81.00 per metric ton for calorific value of 6000 GAD and 15 perc ...
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- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- MS Steel International - UAE
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- PTC India Limited - India
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
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